Suresnes, France, July 21, 1998 -- Dassault Systemes S.A. (Nasdaq: DASTY; Bourse de Paris), a worldwide leading software developer of CAD/CAM/CAE/PDM (computer aided design/manufacturing/engineering/ product data management) products, today announced financial results for the second quarter and six months ended June 30, 1998.

As previously announced, Dassault Systemes completed the acquisition of Deneb on December 30, 1997 and IBM's ProductManager on April 1, 1998. 1997 financial results, including pro forma results, include those of SolidWorks’ as the acquisition was accounted for as a pooling-of-interests. Second quarter and six months pooled pro forma 1997 financial results are presented for comparison purposes only and include the impact of ongoing operations of Deneb as if the acquisition had occurred on January 1, 1997. All references in the press release to 1997 figures are pro forma, unless stated otherwise. In addition, in connection with the acquisition of ProductManager, 1998 second quarter and six months financial results include an estimated pretax write-off of FF 93.8 million ($15.5 million) of in process R&D. All financial figures in this press release are before this write-off, unless otherwise noted.

For the 1998 second quarter total revenue increased 34% to FF 592.3 million, compared to second quarter 1997 total revenue of FF 441.7 million. Software revenue increased 36% to FF 505.0 million, up from FF 372.5 million in the year-ago period.

Charles Edelstenne, Dassault Systemes' Chairman and Chief Executive Officer, commented, "The Company reported strong revenue growth this quarter, with all geographic regions reporting revenue gains. Total revenue increased 43% in the Americas, followed by a very strong performance in Europe, with revenue increasing 37%. Asia grew 13% and represented approximately 17% of total revenue."

Recurring software revenue represented 40% of total software revenue in the quarter and 46% on a year-to-date basis. New CATIA-CADAM workstation seats shipped in the quarter totaled 4,790 and new SolidWorks seats shipped totaled 3,577. Service and other revenue totaled FF 87.3 million and represented 15% of total revenue.

Bernard Charles, President of Dassault Systemes, stated, "All of our businesses exhibited solid progress and notable successes in the second quarter. I believe these results benefit from our technology leadership and the market segmentation strategy we have implemented, both from a product and sales organizations standpoint.

"SolidWorks and Deneb had a very nice quarter, with good revenue growth. Earlier this month ENOVIA Corporation, a Dassault Systemes company which serves the PDM II market together with IBM, announced the general availability of ENOVIAVPM Version 1 Release 1.0 for Virtual Product Development Management (VPDM). This new multi-CAD software suite promotes innovation, creativity and technology leadership and optimization through total digital product life cycle, helping companies to reach new markets, create new products faster, and increase market share.

"And, finally, we are particularly pleased to announce that Porsche, who has been using CATIA solutions as their core design software since 1990, is now implementing the CATIA process centric solution for their next generation engines, confirming the industry trends to integrate and streamline their processes."

Operating income increased 61% to FF 182.4 million in the recent quarter, compared to FF 113.6 million in the 1997 period. The operating margin in the 1998 second quarter increased to 31%, up from 26% in the 1997 second quarter. Net income in the 1998 second quarter rose 59% to FF112.0 million, compared to second quarter 1997 net income of FF 70.5 million. On a per share basis, net income increased 46% to FF 0.98 per diluted share, compared to FF 0.67 per diluted share in the 1997 three-month period.

Thibault de Tersant, Executive Vice President of Dassault Systemes, commented, "The 13% revenue growth rate we experienced in Asia this quarter was reasonably satisfactory given the economic conditions. Nonetheless, we continue to be cautious in our outlook towards Asia due to the economic and currency conditions in the various countries in that region."

For the six months ended June 30, 1998, total revenue increased 29% to FF 1,188.5 million, up from FF 922.6 million and net income increased 41% to FF 253.3 million, compared to FF 179.7 million in the year-ago period. Net income totaled FF 2.23 per diluted share in the 1998 six-month period, representing an increase of 30% over net income per diluted share of FF 1.71 in the corresponding 1997 period. New CATIA-CADAM workstation seats shipped in the 1998 six month period totaled 10,794 and new SolidWorks seats shipped totaled 6,640.

About Dassault Systèmes

Dassault Systèmes, the 3DEXPERIENCE Company, is a catalyst for human progress. We provide business and people with collaborative virtual environments to imagine sustainable innovations. By creating 'virtual twin experiences’ of the real world with our 3DEXPERIENCE platform and applications, our customers push the boundaries of innovation, learning and production. 

Dassault Systèmes’ 20,000 employees are bringing value to more than 290,000 customers of all sizes, in all industries, in more than 140 countries. For more information, visit https://www.3ds.com